September 19, 2002
Memorandum For Foreign-Trade Zone Grantees
From: Dennis Puccinelli
Executive Secretary
Subject:
1. SECURITY
2. FTZ ANNUAL REPORT - FY 2002
3. NEW ADDRESS
4. OIL REFINERY MODIFICATION GUIDELINES
5. EXPORT FIGURES; REPORTING MATTERS; CENSUS; WEB PAGE
1. SECURITY
As you are all aware, security is a top priority. We recognize that FTZs have provided a secure environment in the past, and we expect that, with the cooperation of zone grantees, operators and users, FTZs will continue to be a model for security. FTZs already are subject to security requirements that exceed those required of importers in general. For example, FTZ operators are responsible for the safekeeping of merchandise that is admitted to zones and they must establish procedures that are consistent with Customs security standards and specifications. (See 19 CFR Sec. 146.4 of the regulations of the U.S. Customs Service.) In addition, key personnel of companies operating FTZs, including subzones, are subject to Customs background checks.
In the high security environment in which we are currently living, however, we must all work to improve our procedures beyond what we have done in the past. FTZ grantees and operators have a special responsibility to take extra care to ensure security within their zone project. Grantees and operators should be aware of all parties using the zone and of all activities occurring within the zone, conducting periodic inspections of active zone facilities. They should contact their Customs port director if they have any concerns. We ask that FTZ grantees and operators review and follow the guidelines in the security bulletin published by Customs and posted on our web (http://ia.ita.doc.gov/ftzpage/security.html). I have attached a copy for your convenience.
2. ANNUAL REPORT - FY 2002
I appreciate the effort most grantees have been making to submit their reports on time and to respond to our follow up questions. We ask for your continued attention to this requirement so that we can meet our goals for timely review, publication and distribution of our report to Congress and to zone grantees. Further, compliance in this area is needed if we are to respond to your applications and requests in a timely manner.
Therefore, I am writing to remind you about the annual report that is due to the FTZ Board from each zone grantee. The deadline for the FY 2002 report is the usual end-of-January date (1/31/2003). The annual report format has been updated, with some minor changes resulting from discussions with the National Association of Foreign-Trade Zones. We clarified our request for employment information to include contract employees working within zone sites. We also added "Main Countries of Origin" for the top five categories of foreign status merchandise received at zones or subzones. For the subzone report, the request for the approximate figure for level of production has been moved from the Summary Section (A.) to the Movement of Merchandise Section (B.3.). We also clarified our definitions of the terms "level of production" and "value added." The revised format, which was approved by OMB last December, is available on the FTZ Board Web site along with application guidelines and other information on
FTZ matters. The FTZ web address is:
http://ia.ita.doc.gov/ftzpage/
If you wish to obtain a copy of the annual report format from our Web site, we suggest you download the new Word version. (It was written in Times New Roman font - 12 point). We ask that each grantee pass the report format on to each of its subzones and operators. We also ask that you provide subzones and operators sufficient time (i.e., 60 days) to provide complete and accurate information.
Attached to the annual report format are guidelines for oil refinery subzones, which replace the standard Part V of the annual report format. The guidelines are designed to assist oil refinery subzone operators in preparing the report and to improve the overall quality of the information received. They were developed in consultation with representatives of oil refinery subzones. (They were approved by OMB as part of our revised annual report package last December.)
Several years ago, we moved the due date from the year-end holiday period to January 31 to give grantees more time, and we will consider requests for time extensions (usually 30-60 days) based on special circumstances. Such requests can be made by fax (202 482-0002) or e-mail (Dennis_Puccinelli@ita.doc.gov or Claudia_Hausler@ita.doc.gov).
3. NEW ADDRESS - Reminder
This is a reminder that the office of the Foreign-Trade Zones staff moved last fall from the main Commerce Building to the Franklin Court Building - Suite 4100W. Please note that we have two addresses depending on the method of delivery. One address is for letters and packages sent by package delivery companies and the other address is for letters and packages sent through the U.S. Postal Service. (Note the different zip codes.) U.S. mail will be sent to the main Commerce building and sent by courier to us. Visitors should come to the first address, which is about 7 blocks north of the main Commerce Building.
1. Submissions Via Express Delivery Companies:
Foreign-Trade-Zones Board
U.S. Department of Commerce
Franklin Court Building - Suite 4100W
1099 14th St. NW, Washington, D.C. 20005
2. Submissions Via the U.S. Postal Service:
Foreign-Trade-Zones Board
U.S. Department of Commerce
FCB - Suite 4100W
1401 Constitution Ave. NW
Washington, D.C. 20230
4. OIL REFINERY BOUNDARY MODIFICATION PROCEDURES
I also am attaching a memo to zone grantees and Customs port directors that outlines a special boundary modification procedure that is designed to address certain circumstances in which an oil refinery may need to modify its subzone boundary in order to address emergency or other special situations.
5. EXPORT FIGURES; REPORTING MATTERS; CENSUS; WEB PAGE
Export Figures. The following is a discussion regarding some technical issues for reporting the movement of merchandise figures in the annual report. As we mentioned last year, export figures should be based on the zone operator’s knowledge of destination. This means that, for FTZ reporting purposes, grantees or operators, to the best of their knowledge, should report as exported any merchandise that is eventually exported, even though the merchandise may leave the zone on a consumption entry prior to export. We are aware that some subzone operators are electing to make entry for consumption for duty-free products when they leave the zone, even though some products are later exported. If the products are later exported by the company or an affiliate, or used as the basis for a drawback claim, the products must be reported as exports, under the “Forwarded, To Foreign Countries” heading. Such data may be estimated or derived from existing annual data. In general, the figures for the FTZ annual report can be derived from existing data, including data available from an operator’s Customs inventory system, which tracks foreign status merchandise, and existing company information.
Narrative Section. The narrative section of the report has been getting greater attention because it is the section where zones and subzones describe how FTZ status is contributing to the positive economic effects that were the basis of approval. I urge you to focus on this section. You may answer the questions in a single narrative format (that can be attached to the report) that can be updated year to year. This may be easier than answering each question individually.
Census. As we have mentioned previously, statistical data on merchandise admitted to zones must be reported on the CF-214A, and all merchandise exported must be reported on the Shippers Export Declaration (SED). I want to draw particular attention to the U.S. Census Bureau's (Census) Automated Foreign Trade Zone Reporting Program (AFTZRP) which allow FTZ's to submit their 214A statistical data directly to the Census, via the internet (www.census.gov/foreign-trade/aftzrp). Also, U.S. Customs (Customs) and Census have developed an internet-based SED reporting system as part of the Automated Export System (AES)(See www.aesdirect.gov). I believe these programs will not only improve the accuracy of our trade data but also improve reporting efficiency for zone users. If you have any questions concerning AFTZRP, please contact the Data Collection Coordination Branch at 301-457-2259. For questions concerning AES, please contact the AES Branch at 1-800-549-0595, and, for Census data products, please contact the Data Dissemination Branch at 301-457-2311.
Lapse. Subzones are subject to the lapse provision individually. (See Lapse Guidelines on our web page.) We are asking that grantees track their subzones with respect to the lapse provision and report to us any subzones that become affected by the lapse provision. (Contact: Claudia Hausler (202) 482-2862). We also ask that you list such subzones that have lapsed in your annual report.
FTZ Web Page. We have completed a major restructuring of our web page. It now includes more information in a format that is designed to be easier to use. In addition to the “Grantee Information Page” added last year, we now have an “Oil Refinery Subzone Information Page.” Also, in our archive of Federal Register Notices (1980-1997), we have added instruction to assist users to look up Board Orders and application notices. If you have any comments or suggestions, please contact Liz Whiteman at “Elizabeth_Whiteman@ita.doc.gov”.
FTZ Staff. For those of you that have not had the opportunity to visit the FTZ Board staff recently, I would like to provide you with an updated list of our staff members. Our e-mail addresses are first and last names, separated with an underscore (“_”), plus “@ita.doc.gov”.
